Lindsay Corporation Reports Fiscal 2021 Third Quarter Results

  • Third quarter consolidated revenues increase 32 percent to $161.9 million with EPS of $1.61
  • Higher agriculture commodity prices drive improved demand for irrigation equipment across all geographies
  • Irrigation revenues increase 39 percent in North America and 62 percent in international markets
  • Infrastructure revenues decrease 21 percent due to coronavirus-related project delays

Lindsay Corporation (NYSE: LNN), a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology, today announced results for its third quarter of fiscal 2021, which ended on May 31, 2021.

Third Quarter Summary

Revenues for the third quarter of fiscal 2021 were $161.9 million, an increase of $38.8 million, or 32 percent, compared to revenues of $123.1 million in the prior year third quarter. Net earnings for the quarter were $17.8 million, or $1.61 per diluted share, compared with net earnings of $10.1 million, or $0.93 per diluted share, for the prior year third quarter.

“Healthy agricultural market fundamentals and positive grower sentiment continue to drive increased global demand for irrigation equipment,” said Randy Wood, President and Chief Executive Officer. “At the same time, raw material inflation and other supply chain issues continue to create challenges and margin headwinds. Our teams have responded well and effectively managed through these dynamic market conditions in order to support our customers.”

Third Quarter Segment Results

Irrigation segment revenues for the third quarter of fiscal 2021 increased $44.7 million, or 47 percent, to $140.2 million, compared to $95.5 million in the prior year third quarter. North America irrigation revenues increased $24.5 million, or 39 percent, to $87.4 million compared to the prior year third quarter. The increase resulted from a combination of higher irrigation equipment unit sales volume and higher average selling prices. The increase was partially offset by lower engineering services revenue. International irrigation revenues of $52.8 million increased $20.2 million, or 62 percent, compared to the prior year third quarter. The increase resulted from higher unit sales volumes in most international markets, higher prices, and favorable foreign currency translation impact of $2.3 million.

Irrigation segment operating income was $23.9 million, an increase of $8.5 million, or 55 percent, compared to the prior year third quarter. Operating margin was 17.1 percent of sales, compared to 16.1 percent of sales in the prior year third quarter. The increase resulted primarily from the impact of higher irrigation system unit volume and was partially offset by the impact of higher raw material and other costs.

Infrastructure segment revenues for the third quarter of fiscal 2021 decreased $5.8 million, or 21 percent, to $21.8 million, compared to $27.6 million in the prior year third quarter. The decrease resulted from lower Road Zipper System® sales, which were partially offset by higher Road Zipper System lease revenue and increased sales of road safety products. Road construction activity and the timing of certain projects continues to be impacted by coronavirus-related delays.

Infrastructure segment operating income was $3.8 million, a decrease of $4.4 million, or 54 percent, compared to the prior year third quarter. Operating margin was 17.3 percent of sales, compared to 29.5 percent of sales in the prior year third quarter. Current year results reflect lower revenues and a less favorable margin mix of revenues compared to the prior year.

The backlog of unfilled orders at May 31, 2021 was $120.8 million compared with $78.6 million at May 31, 2020. The irrigation backlog is higher compared to the prior year while the infrastructure backlog is lower due to two large orders in the prior year that did not repeat.

Outlook

“Market conditions support continued robust demand for irrigation equipment, and we also expect raw material inflation and supply chain challenges to persist through the balance of our fiscal year,” said Mr. Wood. “We remain optimistic about the outlook for our infrastructure business, particularly as coronavirus restrictions are lifted and road construction activity returns to more normal levels.”

Mr. Wood continued, “Our financial position remains strong, providing support for our innovation growth strategy across our businesses that address global megatrends and provide solutions that improve customer profitability and assist in their sustainability efforts.”

Third Quarter Conference Call

Lindsay’s fiscal 2021 third quarter investor conference call is scheduled for 11:00 a.m. Eastern Time today. Interested investors may participate in the call by dialing (833) 535-2202 in the U.S., or (412) 902-6745 internationally, and requesting the Lindsay Corporation call. Additionally, the conference call will be simulcast live on the Internet and can be accessed via the investor relations section of the Company's Web site, www.lindsay.com. Replays of the conference call will remain on our Web site through the next quarterly earnings release. The Company will have a slide presentation available to augment management's formal presentation, which will also be accessible via the Company's Web site.

About the Company

Lindsay Corporation (NYSE: LNN) is a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology. Established in 1955, the company has been at the forefront of research and development of innovative solutions to meet the food, fuel, fiber and transportation needs of the world’s rapidly growing population. The Lindsay family of irrigation brands includes Zimmatic® center pivot and lateral move agricultural irrigation systems and FieldNET® remote irrigation management and scheduling technology, as well as irrigation consulting and design and industrial IoT solutions. Also a global leader in the transportation industry, Lindsay Transportation Solutions manufactures equipment to improve road safety and keep traffic moving on the world’s roads, bridges and tunnels, through the Barrier Systems®, Road Zipper® and Snoline™ brands. For more information about Lindsay Corporation, visit www.lindsay.com.

Concerning Forward-looking Statements

This release contains forward-looking statements that are subject to risks and uncertainties and which reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, Company performance and financial results. You can find a discussion of many of these risks and uncertainties in the annual, quarterly and current reports that the Company files with the Securities and Exchange Commission. Forward-looking statements include information concerning possible or assumed future results of operations and planned financing of the Company and those statements preceded by, followed by or including the words “anticipate,” “estimate,” “believe,” “intend,” "expect," "outlook," "could," "may," "should," “will,” or similar expressions. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking information contained in this press release.

 
 
 
 

LINDSAY CORPORATION AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Nine months ended

 

(in thousands, except per share amounts)

 

 

May 31,

2021

 

 

 

May 31,

2020

 

 

 

May 31,

2021

 

 

 

May 31,

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

 

$

 

161,936

 

 

$

 

123,106

 

 

$

 

413,998

 

 

$

 

346,287

 

Cost of operating revenues

 

 

 

117,880

 

 

 

 

83,410

 

 

 

 

297,360

 

 

 

 

239,111

 

Gross profit

 

 

 

44,056

 

 

 

 

39,696

 

 

 

 

116,638

 

 

 

 

107,176

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling expense

 

 

 

7,570

 

 

 

 

7,417

 

 

 

 

22,680

 

 

 

 

22,101

 

General and administrative expense

 

 

 

12,043

 

 

 

 

13,055

 

 

 

 

39,770

 

 

 

 

38,026

 

Engineering and research expense

 

 

 

3,102

 

 

 

 

3,396

 

 

 

 

9,504

 

 

 

 

10,303

 

Total operating expenses

 

 

 

22,715

 

 

 

 

23,868

 

 

 

 

71,954

 

 

 

 

70,430

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

21,341

 

 

 

 

15,828

 

 

 

 

44,684

 

 

 

 

36,746

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

(1,178

)

 

 

 

(1,197

)

 

 

 

(3,584

)

 

 

 

(3,574

)

Interest income

 

 

 

227

 

 

 

 

408

 

 

 

 

798

 

 

 

 

1,412

 

Other expense, net

 

 

 

764

 

 

 

 

(2,774

)

 

 

 

699

 

 

 

 

(4,197

)

Total other (expense) income

 

 

 

(187

)

 

 

 

(3,563

)

 

 

 

(2,087

)

 

 

 

(6,359

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

 

 

21,154

 

 

 

 

12,265

 

 

 

 

42,597

 

 

 

 

30,387

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

 

3,357

 

 

 

 

2,171

 

 

 

 

5,829

 

 

 

 

6,432

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

 

17,797

 

 

$

 

10,094

 

 

$

 

36,768

 

 

$

 

23,955

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 

1.63

 

 

$

 

0.93

 

 

$

 

3.38

 

 

$

 

2.21

 

Diluted

 

$

 

1.61

 

 

$

 

0.93

 

 

$

 

3.35

 

 

$

 

2.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

10,907

 

 

 

 

10,835

 

 

 

 

10,879

 

 

 

 

10,818

 

Diluted

 

 

 

11,033

 

 

 

 

10,877

 

 

 

 

10,967

 

 

 

 

10,854

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

$

0.33

$

0.32

$

0.97

$

0.94

 
 
 
 
 

LINDSAY CORPORATION AND SUBSIDIARIES

 

SUMMARY OPERATING RESULTS

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

Nine months ended

 

(in thousands)

 

 

May 31,

2021

 

 

 

May 31,

2020

 

 

 

May 31,

2021

 

 

 

May 31,

2020

 

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Irrigation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

 

87,364

 

 

$

 

62,895

 

 

 

 

220,332

 

 

$

 

183,570

 

International

 

 

 

52,812

 

 

 

 

32,606

 

 

 

 

125,772

 

 

 

 

88,751

 

Irrigation segment

 

 

 

140,176

 

 

 

 

95,501

 

 

$

 

346,104

 

 

$

 

272,321

 

Infrastructure segment

 

 

 

21,760

 

 

 

 

27,605

 

 

 

 

67,894

 

 

 

 

73,966

 

Total operating revenues

 

$

 

161,936

 

 

$

 

123,106

 

 

$

 

413,998

 

 

$

 

346,287

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Irrigation segment

 

$

 

23,925

 

 

$

 

15,417

 

 

$

 

52,603

 

 

$

 

35,282

 

Infrastructure segment

 

 

 

3,767

 

 

 

 

8,157

 

 

 

 

14,364

 

 

 

 

22,788

 

Corporate

 

 

 

(6,351

)

 

 

 

(7,746

)

 

 

 

(22,283

)

 

 

 

(21,324

)

Total operating income

 

$

 

21,341

 

 

$

 

15,828

 

 

$

 

44,684

 

 

$

 

36,746

 

 

The Company manages its business activities in two reportable segments as follows:

Irrigation This reporting segment includes the manufacture and marketing of center pivot, lateral move and hose reel irrigation systems and large diameter steel tubing as well as various innovative technology solutions such as GPS positioning and guidance, variable rate irrigation, remote irrigation management and scheduling technology, irrigation consulting and design and industrial IoT solutions.

Infrastructure – This reporting segment includes the manufacture and marketing of moveable barriers, specialty barriers, crash cushions and end terminals, and road marking and road safety equipment.

Certain immaterial reclassifications have been made to the prior year operating results to conform with current year presentation, as revenues and operating income from certain product lines previously included within the Infrastructure reporting segment are now included within the Irrigation reporting segment.

 
 
 
 
 

LINDSAY CORPORATION AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

May 31,

2021

 

 

May 31,

2020

 

 

August 31,

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 

120,801

 

 

$

 

102,474

 

 

$

 

121,403

 

Marketable securities

 

 

 

19,663

 

 

 

 

19,012

 

 

 

 

19,511

 

Receivables, net

 

 

 

107,713

 

 

 

 

84,931

 

 

 

 

84,604

 

Inventories, net

 

 

 

136,601

 

 

 

 

113,301

 

 

 

 

104,792

 

Other current assets, net

 

 

 

32,947

 

 

 

 

19,469

 

 

 

 

17,625

 

Total current assets

 

 

 

417,725

 

 

 

 

339,187

 

 

 

 

347,935

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant, and equipment, net

 

 

 

92,517

 

 

 

 

72,827

 

 

 

 

79,581

 

Intangibles, net

 

 

 

21,893

 

 

 

 

24,053

 

 

 

 

23,477

 

Goodwill

 

 

 

68,134

 

 

 

 

67,635

 

 

 

 

68,004

 

Operating lease right-of-use assets

 

 

 

19,360

 

 

 

 

27,663

 

 

 

 

27,457

 

Deferred income tax assets

 

 

 

10,247

 

 

 

 

11,118

 

 

 

 

9,935

 

Other noncurrent assets, net

 

 

 

12,341

 

 

 

 

15,003

 

 

 

 

14,137

 

Total assets

 

$

 

642,217

 

 

$

 

557,486

 

 

$

 

570,526

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

 

49,351

 

 

$

 

35,310

 

 

$

 

29,554

 

Current portion of long-term debt

 

 

 

216

 

 

 

 

195

 

 

 

 

195

 

Other current liabilities

 

 

 

94,589

 

 

 

 

71,712

 

 

 

 

72,646

 

Total current liabilities

 

 

 

144,156

 

 

 

 

107,217

 

 

 

 

102,395

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension benefits liabilities

 

 

 

6,086

 

 

 

 

5,787

 

 

 

 

6,374

 

Long-term debt

 

 

 

115,557

 

 

 

 

115,723

 

 

 

 

115,682

 

Operating lease liabilities

 

 

 

19,369

 

 

 

 

26,333

 

 

 

 

25,862

 

Deferred income tax liabilities

 

 

 

881

 

 

 

 

835

 

 

 

 

889

 

Other noncurrent liabilities

 

 

 

19,995

 

 

 

 

18,633

 

 

 

 

20,806

 

Total liabilities

 

 

 

306,044

 

 

 

 

274,528

 

 

 

 

272,008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

 

18,991

 

 

 

 

18,918

 

 

 

 

18,918

 

Capital in excess of stated value

 

 

 

85,257

 

 

 

 

76,188

 

 

 

 

77,686

 

Retained earnings

 

 

 

525,926

 

 

 

 

488,518

 

 

 

 

499,724

 

Less treasury stock - at cost

 

 

 

(277,238

)

 

 

 

(277,238

)

 

 

 

(277,238

)

Accumulated other comprehensive loss, net

 

 

 

(16,763

)

 

 

 

(23,428

)

 

 

 

(20,572

)

Total shareholders' equity

 

 

 

336,173

 

 

 

 

282,958

 

 

 

 

298,518

 

Total liabilities and shareholders' equity

 

$

 

642,217

 

 

$

 

557,486

 

 

$

 

570,526

 

 
 
 
 
 

LINDSAY CORPORATION AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended

 

(in thousands)

 

 

May 31, 2021

 

 

 

May 31, 2020

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

 

36,768

 

 

$

 

23,955

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

14,688

 

 

 

 

14,146

 

Gain on sale of assets held-for-sale

 

 

 

 

 

 

 

(1,191

)

Provision for uncollectible accounts receivable

 

 

 

304

 

 

 

 

466

 

Deferred income taxes

 

 

 

205

 

 

 

 

27

 

Share-based compensation expense

 

 

 

5,021

 

 

 

 

4,118

 

Unrealized foreign currency transaction (gain) loss

 

 

 

(1,934

)

 

 

 

3,632

 

Other, net

 

 

 

(2,123

)

 

 

 

1,575

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

Receivables

 

 

 

(22,934

)

 

 

 

(11,379

)

Inventories

 

 

 

(28,612

)

 

 

 

(23,765

)

Other current assets

 

 

 

(14,025

)

 

 

 

(6,681

)

Accounts payable

 

 

 

20,828

 

 

 

 

5,385

 

Other current liabilities

 

 

 

20,149

 

 

 

 

14,485

 

Other noncurrent assets and liabilities

 

 

 

2,325

 

 

 

 

(8,810

)

Net cash provided by operating activities

 

 

 

30,660

 

 

 

 

15,963

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

Purchases of property, plant, and equipment

 

 

 

(22,532

)

 

 

 

(12,268

)

Proceeds from sale of property and equipment held-for-sale

 

 

 

 

 

 

 

3,955

 

Purchases of marketable securities available-for-sale

 

 

 

(13,067

)

 

 

 

(23,389

)

Proceeds from maturities of marketable securities available-for-sale

 

 

 

12,592

 

 

 

 

4,320

 

Acquisition of business, net of cash acquired

 

 

 

 

 

 

 

(3,034

)

Other investing activities, net

 

 

 

(1,960

)

 

 

 

1,503

 

Net cash used in investing activities

 

 

 

(24,967

)

 

 

 

(28,913

)

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

 

3,892

 

 

 

 

1,545

 

Common stock withheld for payroll tax obligations

 

 

 

(1,269

)

 

 

 

(1,111

)

Principal payments on long-term debt

 

 

 

(141

)

 

 

 

(174

)

Dividends paid

 

 

 

(10,566

)

 

 

 

(10,177

)

Net cash used in financing activities

 

 

 

(8,084

)

 

 

 

(9,917

)

 

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

 

1,789

 

 

 

 

(1,863

)

Net change in cash and cash equivalents

 

 

 

(602

)

 

 

 

(24,730

)

Cash and cash equivalents, beginning of period

 

 

 

121,403

 

 

 

 

127,204

 

Cash and cash equivalents, end of period

 

$

 

120,801

 

 

$

 

102,474

 

 
 

 

Contacts

LINDSAY CORPORATION:

Brian Ketcham

Senior Vice President & Chief Financial Officer

402-827-6579

THREE PART ADVISORS:

Hala Elsherbini

214-442-0016

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